Seadrill orders two drillships at Samsung

Seadrill reports that it has entered into a turnkey contract to build up to four new ultra-deepwater drillships at Samsung Heavy Industries, South Korea.

The first two drillships are firm orders with deliveries set for the first and second quarter 2013.

Seadrill says the total project price per rig is estimated to be less than $600 million, which includes a turnkey contract with the yard, project management, drilling and handling tools, spares, capitalized interest and operations preparations.

In a regulatory filing, Samsung valued the contract for the first two ships at $1.08 billion.

The contract further includes a fixed price option, to be declared during the first quarter 2011, for further two drillships

The dual derrick drillships are of an improved design compared to the three previous drillships Seadrill has taken delivery of from Samsung, with further enhanced capacity related to water depth, technical capabilities as well as increased accommodation capacity.

The new dynamically positioned drillships will be capable of operations in water depths up to 12,000 feet with a hook load capability of 1,250 tons, suiting them for operations in challenging areas such as the Gulf of Mexico, Brazil and West Africa.

The drillships will be the first newbuilds to be outfitted with seven ram configuration of the BOP (Blow Out Preventer) stack.

Seadrill says its decision to add another two ultra-deepwater newbuilds to the existing fleet is based on the continued strength of the offshore drilling market, the return that these investments are expected to deliver and the financial flexibility generated by the company's contract backlog.

Ordering new drillships is considered financial superior to other alternative investments.

Alf C Thorkildsen, Chief Executive Officer of Seadrill Management AS, says: "Our commitment to establish Seadrill as a leading drilling contractor through investing in new high specification offshore drilling units built by quality yards has been well received by our customers and investors. With the most modern drilling fleet in the world and a total contract backlog of $11.5 billion, we have created a solid platform for further growth and a continued high return to our shareholders. These orders confirm our positive view on the market outlook as well as our good experience with this design and the Samsung shipyard."